[charcoalstick]

Instead of candlestick, would it be better to read the price action by looking at the demand and supply trade by trade, that is just following each executed trade?

[Kiwi]

Everything other than this is in some sense a summary of the underlying statistic (trade by trade information).

So, just as an ma or more complex indicator summarizes price bar information, price bars summarize trade by trade inputs.

The question cs, is what speed are you going to trade at (slower suggests more summarization is acceptable) and are you capable of getting more out it by letting your brain summarize the trades rather than letting software do it by creating bar/candlestick/xxx charts?

[charcoalstick]

Originally Posted by Kiwi »

Everything other than this is in some sense a summary of the underlying statistic (trade by trade information).

So, just as an ma or more complex indicator summarizes price bar information, price bars summarize trade by trade inputs.

The question cs, is what speed are you going to trade at (slower suggests more summarization is acceptable) and are you capable of getting more out it by letting your brain summarize the trades rather than letting software do it by creating bar/candlestick/xxx charts?

u phrase the stuff i m trying to say in a really better way..

that is the disadvantage using candlestick or indicator based on formula/software to "summarise the trades" as you describe it...some info could be lost along the way or biased in certain way...

the best is to just use the RAW data trade by trade..but the problem is werther your brain is capable of doing that.

[brownsfan019]

Originally Posted by charcoalstick »

the best is to just use the RAW data trade by trade..but the problem is werther your brain is capable of doing that.

Who says this is the 'best' way to trade?

[atto]

Originally Posted by charcoalstick »

that is the disadvantage using candlestick or indicator based on formula/software to "summarise the trades" as you describe it...some info could be lost along the way or biased in certain way...

At times, I'm most interested in (selectively) losing information . If I am able to make effective trading decisions off a 5-minute chart, then the additional information would only cause information overload.

In a bigger picture, if you were position trading and planned to hold for months, how much information is gained from the tick data? How does the fact that someone went long 5 contracts affect your position?

Check out Blink by Malcolm Gladwell. It's not a trading book, but speaks volumes about selective ignorance and information overload.

[mister ed]

Originally Posted by charcoalstick »

Instead of candlestick, would it be better to read the price action by looking at the demand and supply trade by trade, that is just following each executed trade?

You could plot this on a chart.
Call it a Charcoalstick chart.
You could write a book.
We could start a sub-forum on Charcoalstick charts.
Great possibilities...

[mister ed]

Originally Posted by atto »

Check out Blink by Malcolm Gladwell. It's not a trading book, but speaks volumes about selective ignorance and information overload.

Thanks for this, I had a look at a description of the book at this site, looks really interesting!

[Kiwi]

His other book is good too.